text: Background The Settlement Act, enacted on December 22, 1974, was intended to provide for the final settlement of a land dispute between the Navajo and Hopi tribes that originated nearly a century ago. The 1882 Executive Order, signed by President Chester Arthur, set aside approximately 2.5 million acres of land for the Hopi and “such other Indians as the Secretary of the Interior may see fit to settle thereon.” Since that time, the Navajo and Hopi tribes have disputed the rights and occupancy of the lands. In a 1962 court case, Healing v Jones, the Hopi tribe claimed exclusive rights to the entire reservation, and the Navajo claimed exclusive rights to about 80 percent of the reservation. In 1963, the U.S. Supreme Court affirmed an Arizona District Court decision that set aside about 631,000 acres of the land—known as District Six—as exclusively Hopi and designated the remaining about 1.9 million acres as a joint use area, to be managed and used jointly by the two tribes. The two tribes legally co-owned the joint use area, but the use of the land remained a source of disputes between the two tribes. The Settlement Act authorized the partitioning of the surface of the joint use area and directed that it generally be split evenly between the tribes. It required Navajo households residing on lands partitioned to the Hopi Tribe (Hopi Partitioned Lands) to relocate and, similarly, Hopi households residing on lands partitioned to the Navajo Nation (Navajo Partitioned Lands) to relocate. Figure 1 illustrates the current Navajo and Hopi reservations. Figure 2 illustrates the portion of the reservation near Tuba City, Arizona, that was subject to the land dispute, the area that was designated as exclusively Hopi (District Six), and the partitioned lands. Selected Settlement Act Provisions and ONHIR’s Responsibilities and Structure The Settlement Act and its subsequent amendments contain several key provisions for relocation and other activities. Relocation. The Settlement Act mandated that ONHIR submit a report, including a detailed plan, to Congress concerning the relocation of households and members of each tribe from lands partitioned to the other tribe. ONHIR stated that it has no authority to require any person to leave the land that was awarded to the other tribe. The act instructed that the relocation process be completed 5 years after the relocation plan took effect. The report and plan, which ONHIR transmitted to Congress in April 1981, provided details on relocation of households and their members, including generating names of those residing on the partitioned lands and identifying sites for relocation, among other things. The relocation was scheduled to be completed by July 1986. Specifically, the relocation benefits include $130,000, adjusted to current construction and housing development costs, for a household of three or fewer and $136,000 for a household of four or more to obtain a decent, safe, and sanitary replacement home, in addition to moving expenses and, within the first few years, bonus payments provided within the first years following the relocation plan. Because there were far fewer Hopi households residing on lands partitioned to the Navajo Nation, almost all of the households relocated (about 99 percent) have been for Navajo families. Resettlement land taken into trust for the Navajo Nation. The Settlement Act as amended authorizes and directs the Secretary of the Interior to take certain lands into trust for the Navajo Nation, which would become part of the Navajo Reservation. The 1980 amendments to the Settlement Act required the border of any parcel taken into trust to be within 18 miles of the Navajo reservation’s then boundary. Most of the lands taken into trust in Arizona pursuant to the Settlement Act as amended are known as the New Lands. Navajos living on Hopi Partitioned Lands could choose to relocate to the New Lands, as well as other areas on the Navajo reservation or off-reservation. Administration and use of acquired trust land. Pursuant to the Settlement Act as amended, ONHIR administers these lands taken into trust for the Navajo Nation until relocation is complete. In contrast, Interior administers other land the federal government holds in trust for Indian tribes, including the Navajo Nation. In addition, the Settlement Act as amended requires the lands taken into trust for the Navajo Nation to be used solely for the benefit of Navajo families— known as relocatees—that at the time of the Settlement Act’s enactment had been residing on lands partitioned to the Hopi. Leasing of acquired trust land. The Navajo and Hopi Indian Relocation Amendments of 1988 transferred responsibility for issuing leases and rights-of-way for housing and related facilities on the New Lands from Interior to ONHIR. In July 1990, ONHIR issued procedures for the leasing of New Lands, including homesite and business leases, in section 1810 of its management manual. ONHIR’s regulations specify that the agency’s operation is to be governed by a management manual. Navajo Rehabilitation Trust Fund. The 1988 amendments to the Settlement Act established the Navajo Rehabilitation Trust Fund in the U.S. Treasury. The Trust Fund consists of appropriations made for the fund, deposits of income from certain trust assets, and any interest or investment income accrued. The Trust Fund is essentially a loan from the federal government to the Navajo Nation to be repaid from revenues derived from leases of the lands and minerals taken into trust in New Mexico pursuant to the Settlement Act as amended. The tribe assumed responsibility for managing the Trust Fund pursuant to the American Indian Trust Fund Management Reform Act of 1994, according to Interior officials. Under this act, neither Interior, ONHIR, nor Treasury has a role in managing or overseeing the Trust Fund once a tribe has assumed responsibility for managing it. Aside from administering the relocation activities and the lands taken into trust pursuant to the Settlement Act as amended, ONHIR also operates the Padres Mesa Demonstration Ranch. The ranch was established in fiscal year 2009 on the New Lands and teaches sustainable cattle ranching and modern livestock marketing to the Navajo. According to ONHIR officials, the ranch is on approximately 60,000 acres of trust land acquired pursuant to the Settlement Act as amended. The purpose of the ranch is to teach relocatees methods to maximize income from cattle- raising operations and be good stewards of the land. In addition to purchasing cattle, ONHIR hired an employee to manage the ranch’s operations and contract cowboys to work on the ranch. ONHIR sells the cattle raised on the ranch and uses the proceeds to help pay for ranch operations. According to ONHIR documents, from fiscal years 2009 through 2016, ONHIR obligated approximately $1.8 million for the ranch’s operation from a mixture of appropriations and cattle sale revenue. Over the same period, cattle sales generated over $1.4 million, according to ONHIR documents. The Settlement Act established a three-member commission, the Navajo and Hopi Indian Relocation Commission, to administer the relocation program. The 1988 amendment abolished the three-member Relocation Commission and established in its place ONHIR as an independent entity of the executive branch under the authority of a single Commissioner. ONHIR has not had a Commissioner since 1994 and has been under the leadership of its Executive Director. As of December 2017, ONHIR said that they had 31 employees among its three offices in Flagstaff, Sanders, and Chambers, Arizona. ONHIR was not designed to be a permanent agency, but a specific closing date has not been determined. ONHIR previously developed plans to close out its activities in 2008, according to ONHIR officials, but has continued to operate. The Settlement Act states that ONHIR will cease to exist when the President of the United States determines that its functions have been fully discharged. During a testimony at a congressional hearing in February 2016, ONHIR’s Executive Director said that ONHIR was working toward completing its work so the office can close by the end of fiscal year 2018. ONHIR has developed a draft transition plan, dated March 2017, that identifies, among other things, four areas of activity that would need to be transferred to another entity in the event of its closure in September 2018: (1) appeals and eligibility; (2) housing; (3) administration of the New Lands; and (4) the Padres Mesa Demonstration Ranch. In the draft transition plan, ONHIR primarily identified offices within Interior—including BIA, the Office of Hearings and Appeals, and the Office of the Solicitor—to take over several key activities, as well as other entities including the Department of Justice and the Navajo Nation government. In October 2017, ONHIR supplemented the draft transition plan with an implementation plan to outline the transfer of these four areas, among other things. Other Federal Agencies and Tribal Entities with Responsibilities in Indian Country BIA is generally responsible for the administration and management of land held in trust by the United States for Indians and Indian tribes. BIA provides services to 573 federally recognized tribes and about 1.9 million individual American Indians and Alaska Natives. BIA’s responsibilities include regulating grazing on trust land, leasing trust land, and maintaining roads in Indian country, among other things. BIA administers the vast majority of land held in trust for Indian tribes and has issued regulations governing leasing of and grazing on trust land that it administers, including the Hopi Partitioned Lands and the portions of the Navajo reservation that are not administered by ONHIR. BIA’s regulations do not apply to the lands acquired pursuant to the Settlement Act as amended because under the act, ONHIR is responsible for administering those lands. BIA also administers a Housing Improvement Program that funds rehabilitation of housing units. Other federal agencies, such as HUD and the Indian Health Service, provide housing assistance and infrastructure in Indian country and tribal entities, such as the Navajo Tribal Utility Authority, provide services on the Navajo reservation. HUD, through its Office of Native American Programs, awards block grants (known as the Indian Housing Block Grant program) to tribally designated housing entities, such as the Navajo Housing Authority. These grants can be used to provide housing assistance for tribal members, such as constructing homes. The Indian Health Service is authorized to provide drinking water and sanitation services to Indian homes and communities, among other things. ONHIR and the Indian Health Service have an interagency agreement to share the cost of connecting relocation homes on the reservation to water and sewer lines. Most of the electricity, water, and wastewater on the Navajo reservation are operated by the Navajo Tribal Utility Authority, an enterprise of the Navajo Nation government. Similarly, ONHIR and the Navajo Tribal Utility Authority have an interagency agreement for the construction of electrical power lines and related services for relocation homes. The Navajo Nation government makes decisions about allocation of resources, including federal grants it receives. The Navajo Nation Council hosts 24 council delegates representing 110 Navajo Nation chapters. The chapters are political subdivisions of the Navajo Nation with delegated authority to address local issues pertaining to the land and health status of their respective chapter populations. In a March 2014 report, we found each chapter could have different development priorities and approval processes for housing programs and services. In its comments on a draft of this report, ONHIR stated that more than 400 families have moved to the New Lands, and over 1,200 families have moved to locations outside the Navajo Nation. The New Lands are part of the Nahata Dziil Chapter. Housing Issues in Indian Communities We have previously found that American Indians have historically faced worse housing conditions than other socioeconomic groups. They disproportionately experience socioeconomic challenges, including high unemployment and extreme poverty, which affect housing conditions on Indian reservations and in Indian communities. Overcrowding, substandard housing, and homelessness are far more common in American Indian communities. For example, a 2017 Urban Institute report prepared for HUD found that 5.6 percent of American Indian households had problems with plumbing, 6.6 percent had problems with the kitchen, and 12 percent had problems with heating. In comparison, 1.3 percent of households in the United States had problems with plumbing, 1.7 percent had problems with the kitchen, and 0.1 percent had problems with heating. As we have previously found, common housing challenges in Indian communities are largely related to remoteness and other geographical factors, lack of adequate infrastructure, land use regulation, and other factors. Some remote areas where Indian tribes are located can present unique logistical challenges, including a lack of buildable land and limited supply of building materials. In some regions, tribes face challenges related to a lack of adequate infrastructure, such as roads, water, and sewer systems. According to Navajo Nation officials, traditionally, tribes lived a lifestyle that was connected to their traditional and ancestral lands, with homes and other structures built from natural materials and constructed in communities with extended families. For example, many of the Navajo who were on the Hopi Partitioned Lands were self-sufficient and lived in traditional homes called hogans, which are made of wooden poles, tree bark, and mud. See figure 3 for an example of a traditional home. ONHIR Has Changed Relocation Eligibility Requirements and Application Deadlines for Various Reasons, and Additional Applicants Could Still File Court Appeals ONHIR Developed an Eligibility Certification Process, and Denied Applicants Can Appeal Their Eligibility Determination ONHIR’s process for certifying applicants’ eligibility to receive relocation benefits has generally been consistent over time since ONHIR began accepting applications. All applicants must apply through ONHIR for relocation benefits and demonstrate that they meet eligibility criteria, discussed later in this report. Based on eligibility criteria, in general, a certifying officer determines whether an applicant is certified or denied. If an applicant is certified, the applicant becomes an ONHIR client for relocation. If an applicant is denied, the applicant is eligible to file for appeals—first, an administrative appeal, then an appeal with the U.S. District Court for the District of Arizona, if the administrative appeal upholds the denial decision. Figure 4 illustrates this process. If an applicant is denied, he or she can obtain assistance from the Navajo-Hopi Legal Services Program, an entity established in 1983 within the Navajo Nation’s Department of Justice to assist individual members of the Navajo and Hopi tribes who were affected by the Settlement Act. Applicants’ denial letters indicate that the applicant can seek counsel through this program; however, not all applicants are represented by counsel for the administrative hearing. As of July 2017, ONHIR had spent about $1.5 million on legal services and over $1.2 million on the hearing officer who adjudicates the administrative appeals. In addition, about $285,000 was spent for an attorney salary at the Navajo-Hopi Legal Services Program from 2009 through 2011 and, according to ONHIR officials, about $418,000 was spent on attorney fees for applicants whose eligibility for relocation benefits was reversed in the U.S. District Court. As of December 2017, ONHIR had certified more than 3,800 households since the agency began reviewing its first applicants in 1977. The certification process on average has taken about 979 days for those who were certified without a need to file for an appeal and 3,301 days for those who were certified through the appeals process (that is, those who had their denied application reversed through the appeals process). Figure 5 illustrates these time frames. ONHIR Has Extended Application Periods and Changed Eligibility Requirements for Varying Reasons For various reasons, ONHIR provided three additional application periods after the first application period deadline in 1986, which were not included in the plan ONHIR submitted to Congress. After the original deadline, ONHIR provided a second application period from April 1997 through March 2000 after the enactment of a new law, which ratified a formal agreement under which the Hopi tribe agreed to allow traditional Navajo residents to remain living on Hopi Partitioned Lands for 75 years. In conjunction, the formal agreement provided that ONHIR relocate all eligible Navajo residents on Hopi Partitioned Lands who (1) did not sign an individual agreement to remain on the land, or (2) signed but then surrendered their signed individual agreement before the February 2000 deadline. ONHIR accepted applications again from May 2005 through June 2006 (third application period) based on language in a 2005 Senate bill to provide a last chance for Navajos living on Hopi Partitioned Lands to relocate, which passed the Senate but was not enacted, according to ONHIR officials. ONHIR was not required to reopen its application process, but it chose to do so. Even though ONHIR issued relocation notices in newspapers and at chapter facilities at the time of the original application period, ONHIR officials said that the additional application periods were in recognition that not all Navajo residing on the Hopi Partitioned Lands had moved, an outcome that was not considered in the original plans. ONHIR also accepted applications from February 2008 through September 2010 (fourth application period) in response to a federal court decision that concluded that ONHIR had not provided personal notice to a potentially eligible applicant before July 7, 1986 (the deadline for the initial application process) to enable him to apply for relocation benefits. According to ONHIR officials, in consultation with the Department of Justice in Washington, D.C. and the U.S. Attorney’s Office in Arizona, ONHIR reopened the process for applications to help ensure that everyone who might be eligible for benefits was given the opportunity to apply, rather than litigating a series of similar cases. ONHIR officials said they worked closely with the Navajo Nation to send out letters of notification to potential eligible applicants, even though they were not required to reopen the application process. These three additional application periods have resulted in more applicants and time required for ONHIR to review applications. The numbers of applicants and outcomes across the different application periods are summarized in table 1. The attempts to prompt more Navajos to relocate in the second and third application periods resulted in a limited number of applications, 129 and 167 applicants, respectively. However, ONHIR received nearly 2,300 applicants during the fourth application period. Throughout the multiple application periods, applicants demonstrated two key eligibility criteria: (1) head of household status and (2) residency on the lands partitioned to the other tribe. However, ONHIR chose and applied varying eligibility rules related to residency status over the different application periods. Original application period. Under the original residency status criterion, applicants had to demonstrate that they were residents of the partitioned lands on December 22, 1974 (the date the Settlement Act was passed) and had not moved there within the previous year. Second and third application periods. During the second and third application periods, ONHIR used provisions for late applicants— persons who had not applied for relocation benefits before the original deadline—that were established in 1986 amendments to ONHIR’s regulations and that revised the residency status eligibility criterion. Unlike the original residency criterion, the agency guidance applicable to applicants during the second and third application period stated that applicants must demonstrate continuous residence on the partitioned lands from December 22, 1974, to July 7, 1986 (the original deadline) and until eligibility determination is rendered. There were exceptions for demonstrating continuous residency as set out in the agency guidelines interpreting the regulations, including for those who were temporarily away for school, prison, medical treatment, and military service. Fourth application period. During the fourth application period, ONHIR decided to apply the original criterion, without the continuous residency requirement implemented in the guidelines for the second and third application periods, for all applicants. ONHIR officials said they made this decision in response to a federal court decision, discussed previously, that concluded that ONHIR had not provided personal notice to a potentially eligible applicant before the original July 1986 deadline; the U.S. District Court District of Arizona applied the original criterion in this decision. The applicant has the burden of proof for providing evidence to meet the eligibility criteria. Demonstrating head of household or residency status has been difficult for residents for several reasons, according to a Navajo-Hopi Legal Services Program representative and Navajo Nation chapter officials we interviewed. For example, Navajo is an oral culture that historically existed mostly on a livestock or cash economy in which transactions were not documented, making it difficult to document the source of income or head of household status. In its comments on a draft of this report, ONHIR stated that the legal residence determination was complicated because many Navajos performed seasonal work and lived outside the Hopi Partitioned Lands for extended periods. According to Navajo Nation officials, oral evidence has not been allowed by the ONHIR Hearings Officer, and language and cultural barriers have also been obstacles. Some Navajos have limited English proficiency, although ONHIR offers translators for Navajo speakers. In its comments on a draft of this report, ONHIR stated that oral evidence has always been allowed but has sometimes been found not to be credible. Another unique characteristic of the Navajo is the use of shared mailboxes at trading posts—a place in the community for people to meet and receive their mail—making it difficult to ensure that ONHIR denial letters or other notifications reach individual applicants. For example, in one appeals case a court found that applicants who did not personally sign for the receipt of a denial letter must be notified of the court’s decision to allow those applicants to file a waiver of the appeal deadline. ONHIR also stated that it offered administrative appeals to Navajos for whom ONHIR could not show actual receipt of denial letters. Although ONHIR Officials Believe That Most Eligible Applicants Have Been Processed, the Potential for Future Court Appeals Remains While ONHIR officials said that eligibility determination has been completed, the potential exists for further federal court appeals, potentially resulting in the need for additional eligibility determinations. As of January 2018, ONHIR officials said that 24 of the remaining 25 households that were denied eligibility benefits have gone through the hearing process and are awaiting their decisions, which officials said should be completed in early 2018. Households whose denials are upheld will be eligible to file for an appeal with the U.S. District Court for the District of Arizona. Additionally, any households that have been denied and are within the 6-year statute of limitations are still eligible to file for appeals in federal court. Eleven cases were pending in the federal district courts and four in federal appeals court as of March 2018, and according to ONHIR officials, at least 240 households that were denied eligibility benefits and whose decisions were upheld by the hearing officer (and are within the 6-year statute of limitation) could potentially file for appeals in federal court before the end of fiscal year 2018. Any additional court appeals could result in the need for additional eligibility determinations in the future. For example, a federal court recently remanded a case to ONHIR to review the applicant’s income information and reevaluate the eligibility determination. According to ONHIR officials, they are taking steps to review the applicant’s case file, investigate the evidence of the applicant’s income to demonstrate the head of household status, and share the findings with the applicant’s attorney. ONHIR officials stated that due to the unique situation of each applicant, they review the information in the applicant’s case file to comply with the court’s order on eligibility determination. ONHIR Has Nearly Completed Home Building but Provided Limited Contractor Oversight, and Outstanding Warranties Remain in Effect ONHIR Developed Policies and Procedures for the Home-Building Process ONHIR’s policies and procedures are intended to provide certified applicants who are eligible for relocation benefits with decent, safe, and sanitary homes, as mandated in the Settlement Act. For example, ONHIR’s management manual includes policies that require ONHIR to provide counseling on the home-building process and home maintenance training for relocatees. Figure 6 shows an example of a relocation home. Prior to moving to relocation homes, many families lived in one-room houses that they constructed themselves with no basic infrastructure, such as electricity, water, or plumbing facilities, and some families were unfamiliar with the features of a modern home. Families lived a spiritual and religious lifestyle that was connected to their traditional culture and ancestral lands, with homes constructed in communities with extended families. ONHIR’s management manual also includes policies that require employees to work with clients on the home acquisition process starting from the time clients are certified and continue until 2 years after the client has been relocated, including assisting clients with finding contractors, signing home-building contracts, understanding home maintenance, and requesting warranty repairs. ONHIR works with families after they have moved into their relocation home by providing assistance with warranty issues; assistance in adjusting to their new community; and referrals to agencies in the new community that provide health care, supplemental nutrition, financial assistance, behavioral health, employment, and other social services. Relocation homes are the property of the client, and ONHIR has no responsibility for relocation homes after a 2-year warranty period on each home expires. ONHIR wrote a standard template of a contract that clients and contractors must sign, but ONHIR is not a signatory of the home-building contract. However, ONHIR is a signatory to the 2-year home warranty contract, along with the client and the contractor. Additional policies and procedures required by ONHIR’s management manual are summarized in table 2. ONHIR’s management manual also includes policies for overseeing contractor performance. ONHIR officials provide clients with a list of home-building contractors, but clients may choose any licensed contractor in the jurisdiction where the home is built. ONHIR officials estimate that more than 95 percent of relocation homes have been built by contractors from its list. ONHIR officials said that contractors on the list ONHIR provides to clients must demonstrate good standing and must be licensed by the state of Arizona, as stated in its policy. In addition, ONHIR’s policy states that ONHIR may take action against contractors whose work results in an excessive number of warranty complaints. Most Building Is Complete, but Weaknesses in Oversight Allowed Poor Performing Contractors to Build Homes The majority of ONHIR’s home-building work is now complete. As of December 2017, according to officials, ONHIR had relocated 3,687 families into new homes, and ONHIR officials said they expect construction on the remaining 20 homes to be completed by September 2018. Although most home-building activities are complete, we found that ONHIR has historically allowed contractors with a history of performance issues to build relocation homes. For example, ONHIR provided us with a report generated from its contractor performance database that shows a contractor who had failed 42 percent of final inspections during a 11-year period—from January 2006 through September 2017—continued to receive home-building contracts. Similarly, we identified homes with multiple warranty complaints in ONHIR’s warranty database. Specifically, one home in the warranty file database had 17 warranty defect complaints attributed to the contractor. ONHIR officials said that they do not track complaints by contractor in a database nor do they have a defined number of complaints for removing contractors. ONHIR officials said that they have not removed a contractor involuntarily from their list since the 1990s. ONHIR officials explained that these contractors continued building homes because it is difficult to find contractors who want to work on the reservation due to the isolated nature of homesites. Moreover, in recent years they said they did not track complaints by contractor because they would be aware of complaints about a contractor due to the smaller number of relocation homes that have been built. As a result, according to ONHIR officials, they have not needed to take actions to remove contractors from their list since the 1990s or to generate reports on contractor performance. In addition, ONHIR officials said some warranty complaints were trivial, such as peeling paint or visible carpet seams, and thus terminating contractors for such issues was unnecessary. ONHIR officials also noted that all homes eventually passed their final inspections and any failed inspection items were corrected and reinspected before contractors received payments. Some Tribal Government Officials and Relocatees Said ONHIR Has Not Discharged Its Responsibilities because of Construction, Societal, and Infrastructure Concerns Although ONHIR said it has nearly completed its relocation obligations, some relocatees, the Hopi tribe, and Navajo Nation government officials said that it has not completed its work. Specifically, Navajo Nation officials and some relocatees said the office should remain open to address various concerns with relocation homes and the societal effects of relocation. Moreover, according to some relocatees and Navajo Nation government officials, these concerns include homes that were built with faulty materials and with unfinished infrastructure, such as electricity. As previously mentioned, ONHIR has no responsibility over relocation homes after the 2-year warranty period on each home expires. However, an official from the Navajo-Hopi Legal Services Program said that homeowners had concerns with their homes beyond the 2-year warranty period. While ONHIR has attributed such issues to a lack of homeowner maintenance, relocatees have attributed these issues to ONHIR’s lack of oversight of the home-building process. Concerns some relocatees and tribal government officials described include the following: Construction. Navajo Nation officials from three separate chapters told us that relocation homes were not built properly. The President of the Navajo Nation said that homes frequently have construction issues related to cheap materials or poor workmanship, while another official said that ONHIR does not properly oversee contractors. Another official told us that the windows fall out of homes when it gets too windy. One official said that some families have left their relocation homes behind because of structural issues. Hopi tribe officials said relocatees from their tribe were provided the cheapest homes available and that the conditions of mobile homes are substandard. See figure 7 for examples of homes with cracked foundations and broken windows. ONHIR officials said they inspect all complaints on relocation homes, even after the warranty period has expired. If the investigation reveals an issue that is a result of a construction defect, ONHIR officials said they will fix the issue, whereas they will not fix issues they deem are the result of poor homeowner maintenance. Soil settling. Navajo Nation officials from two chapters told us that ONHIR did not conduct soil tests on homesites and others said that some homes have experienced foundation issues. For example, one relocatee said her relocation home has cracks in the walls and the floors. ONHIR helps clients to apply for homesite leases, and according to ONHIR officials, they assigned engineering technicians to conduct feasibility studies to assess the condition of the soil for all on-reservation homesites, as required by ONHIR policy. However, ONHIR officials also acknowledged that expansion and contraction of soil over time in Arizona is common and that shifting soil can lead to cracks in the foundation or walls of homes. As reported by the Interior Inspector General in 2016, 5 relocatee homes on the Navajo reservation experienced cracks and other visible signs of damage due to soil settling and have consequently been replaced by ONHIR. ONHIR officials acknowledged that they have demolished and replaced an additional 9 homes due to foundation issues related to soil expansion and other issues, such as leaks in utility lines and septic tanks. For the homes experiencing foundation issues outside of the 14 homes ONHIR has replaced, ONHIR attributed continued soil collapse to homeowners not maintaining the proper degree of slope around their home to allow for drainage. In addition, they said that homes may now be occupied by three generations of families. According to a 2016 Interior Inspector General report, ONHIR officials said this leads to increased water use inside the homes which, in their opinion, exacerbates the soil-settling issue. Societal effects. Relocated families expressed that relocation has contributed to societal ills such as depression; alcoholism; drug abuse; and suicide due to substandard living conditions and homesites away from their family and previous sources of livelihood. The Navajo Nation stated that relocatees experienced hardships adjusting to a new way of life and felt a loss of connection with their culture moving away from their ancestral lands and traditional way of life. According to a report issued by the Navajo Nation Human Rights Commission, relocatees were promised by the federal government, the Hopi Tribe, and the Navajo Nation that relocation would offer a better life that did not materialize. ONHIR officials noted that both the Navajo Nation and the Hopi Tribe have requested extended counseling beyond the warranty period; however, according to the March 2017 transition plan, ONHIR does not believe providing it is within their statutory authority. Connections to utility infrastructure. According to Navajo Nation officials, some homes are not properly connected to utility infrastructure, such as electricity and water. For example, they stated that a number of relocation homes in the Navajo area do not have electricity. In its comments on a draft of this report, ONHIR stated that some relocatees chose to relocate to remote areas and signed a form to affirm that they wanted solar or cistern rather than grid utilities. A representative from the Hopi Tribe told us that in one home, contractors installed plumbing systems that were subsequently covered in concrete, which made repairs difficult. Another chapter official said that a septic tank in one relocation home continually overflowed because the tank was smaller than the specifications. ONHIR officials said all homes are built to code at the time of construction and have proper connections to infrastructure in terms of water and electricity. They said they verify that homes pass necessary inspections, including framing; mechanical; plumbing; and insulation, prior to disbursing payments to the contractors. Community infrastructure. Some Navajo Nation chapter members and ONHIR officials disagree as to whether ONHIR had an obligation to provide additional community infrastructure under the Settlement Act. Some chapter members said that ONHIR should not close because it has not met its responsibilities to provide infrastructure projects, such as paved roads and running water. The Navajo Nation Human Rights Commission report states that relocatees were told they would be provided with running water and the ability to raise livestock, among other things. Provisions in the Settlement Act directed ONHIR to create a report with a plan to ensure that infrastructure such as water, sewers, and roads would be available at their relocation sites. ONHIR published a report to meet the provision in 1981. This provision was repealed in November 1988. ONHIR officials acknowledged that relocatees have expressed the need for additional infrastructure, but said it is not within ONHIR’s statutory responsibility to provide it. The Settlement Act as amended does not require ONHIR to provide infrastructure for the New Lands. Warranty Commitments on Homes Already Built and Homes for Newly Eligible Applicants Are Activities That May Continue into the Future Although ONHIR’s home building for certified applicants is nearly complete, responsibilities remain for existing homes under warranty and any additional homes built for newly certified applicants. As previously discussed, relocation homes are under warranty for 2 years, starting at the time when the house passes final inspection. During this 2-year period, ONHIR is responsible for helping homeowners, who are located on-reservation, request warranty repairs. After September 2018, 52 relocation homes will remain under the 2-year warranty period, according to ONHIR officials. In addition, as previously discussed, ONHIR officials told us that at least 240 denied applicants could still file for appeals in the federal court and become eligible for relocation benefits, which would necessitate the construction of additional homes. A 2-year warranty period would then begin after these houses pass final inspection. Executive Branch or Congressional Action May Be Needed to Terminate ONHIR and Effectively Transfer Remaining Relocation Activities ONHIR Has Not Yet Requested a Presidential Determination for Closure As previously mentioned, ONHIR was not designed to be a permanent agency. The Settlement Act states that ONHIR will cease to exist when the President of the United States determines that its functions have been fully discharged. Although ONHIR officials have said they are working toward completing their tasks so the office can close by the end of fiscal year 2018, they acknowledge that not all activities will be complete by that time. Federal internal control standards state that management should externally communicate the necessary quality information to achieve the entity’s objectives. For example, information necessary to communicate to an agency’s oversight body includes significant matters related to risks or changes. However, according to ONHIR officials, they have not specifically communicated with the President about the determination on whether the agency has fully discharged its functions and whether the office should close. Instead of directly requesting that the President make a determination for ONHIR to cease operations, ONHIR has been making plans to close through other means and transition remaining activities. Specifically, ONHIR officials told us that they anticipate that closure of the office will need to occur through a legislative change or through the termination of program funds through the budget and appropriations process. As stated in the March 2017 transition plan, the plan was developed in response to direction from the Office of Management and Budget and the Senate and House Appropriations Committees that ONHIR should wind down its activities. Further, in its comments on a draft of this report, ONHIR stated that it has had regular communications with executive and legislative branch offices on completing its work and closing. However, neither the draft transition plan nor the October 2017 implementation plan indicates how ONHIR would request a determination from the President that ONHIR has fully discharged its responsibilities and can be terminated. Without such a presidential determination, ONHIR has not met the explicit requirements for being permitted to cease operation under the Settlement Act. ONHIR Has Not Developed Complete Information on Its Remaining Activities Although ONHIR officials anticipate that the agency will close by September 2018, they have not ensured that complete information related to its relocation activities can be made available to other successor agencies. This lack of planning and information could hamper the efforts of a successor agency or agencies to effectively take over these activities. Eligibility and appeals. As previously mentioned, there is the possibility for 240 or more denied households to appeal their eligibility decision in the future, and the paper case files and client database contain important information regarding eligibility for the continuation of ONHIR’s relocation activities. Specifically, paper case files contain comprehensive information on each applicant from the time he or she applied for relocation benefits, including documents submitted to prove head of household or residency status for eligibility determination. In addition, the client database tracks decisions and dates related to the eligibility determination process and is necessary to identify applicants’ status. In its March 2017 transition plan and October 2017 implementation plan, ONHIR has not developed detailed information on how it plans to identify and prepare information in the paper case files and client database for the 240 or more denied households that could file for federal appeals. ONHIR officials said that they have not prepared eligibility determination and appeals information for transfer because they expect eligibility determinations to be completed by the time the office plans to close. In the event that such transfers are needed, they said the transfer of these records will be through an agreement between ONHIR, the National Archives and Records Administration, and BIA. However, such an agreement has not yet been developed, and discussions on the transfer of records—such as during monthly transition meetings—are high-level and mostly unrelated to information needed for potential eligibility determination responsibilities. In addition, officials said that information about appeals filed in the future in the federal court could be obtained from an online federal database. Federal internal control standards state that management should use quality information to achieve the entity’s objectives. Additionally, the standards state that management should identify, analyze, and respond to risks related to achieving the defined objectives. If ONHIR does not take the steps to ensure that complete information for the 240 or more denied households eligible to appeal their eligibility decision is available to a successor agency, a successor agency could face difficulty in administering eligibility determinations and remaining appeals in the future. Warranties and contractor performance. As previously discussed, ONHIR’s remaining home-building responsibilities include managing the 52 remaining 2-year warranty agreements and assisting in the construction of homes for any newly certified applicants. To fulfill these responsibilities, complete information on home warranties and contractor performance is critical. ONHIR’s warranty database has data fields to track relevant information on concerns reported to ONHIR—including warranty expiration date, date warranty complaint received, type of complaint (possible warranty defect or homeowner maintenance issue). However, the database is incomplete. For example, our review found that about 98 percent of warranty complaints in the warranty database have no record of the date of warranty repairs. Moreover, ONHIR does not list the names of contractors in its database. ONHIR officials said the information is not recorded because they rely on memory and paper files to supplement the information in the warranty database about contractors. ONHIR officials also said they do not regularly use the database to monitor contractors’ performance because it became too cumbersome to track electronically. However, in its comments on a draft of this report, ONHIR stated that it has the capability in its electronic data system to search for warranty complaints. In its October 2017 implementation plan, ONHIR suggested BIA’s contract office as a potential successor agency for administering the remaining warranty provisions in the event that it closes before these home-building responsibilities are fully discharged. With regard to any newly certified applicants deemed eligible for benefits through the appeals process, the October 2017 implementation plan suggests that these applicants be given the cash equivalent of a relocation home instead of building new homes. However, the Settlement Act provides for no authority to issue cash payments and Congress has not otherwise authorized cash payments, and any future home-building activities may need to be assumed by a successor agency. Because OHNIR does not have complete information on existing warranties and contractor performance, another successor agency could be hampered in its ability to assume ONHIR’s remaining home-building responsibilities. Federal internal control standards state that management should identify, analyze, and respond to risks related to achieving the defined objectives. Additionally, the standards state that management should use quality information to achieve the entity’s objectives. Without complete warranty and contractor information, a successor agency may have difficulty understanding what warranty issues have already been addressed or have difficulty overseeing contractors to help ensure that newly certified applicants secure decent, safe, and sanitary relocation homes. The Settlement Act Does Not Include Provisions for Transferring Remaining Relocation Activities to Successor Agencies In its transition and implementation plans, ONHIR has identified a number of potential successor agencies that could be selected to take over ONHIR’s remaining activities in different areas. However, officials at these agencies said they currently do not have the authority to undertake these activities under the Settlement Act. Appeals and eligibility. Should ONHIR close before the 6-year statute of limitations has expired for all denied applicants, another agency or agencies would need statutory authority for coordinating eligibility determinations and home-building for any newly certified applicants. As previously discussed, at least 240 households that had been denied relocation benefits as of September 2017 may choose to contest their denial in federal court, according to ONHIR officials. ONHIR’s March 2017 transition plan states that the Department of Justice will continue to represent the government on behalf of ONHIR in any federal court hearings, and ONHIR has also identified Interior’s Office of Hearing and Appeals to hear any matter remanded to the agency by the federal court for a further hearing. Home-building. Another entity would need authority to assume remaining home-building activities. Alternatively, ONHIR’s October 2017 implementation plan suggests that newly certified applicants be given the cash equivalent of a relocation home. However, as previously mentioned, cash payments are not currently authorized under the Settlement Act and legislation would be needed to provide such payments. Moreover, Navajo Nation officials said they do not approve of using cash payments in place of providing relocatees with a home. In November 2017, ONHIR officials said that, as an alternative to cash payments, they discussed with the Navajo Nation the potential for the Navajo Housing Authority—a recipient of the HUD Indian Housing Block Grant Program—to administer remaining home-building activities. They did not make a decision, however, because the Navajo Nation wanted to inquire about the capacity of the Navajo Housing Authority to assume these activities. Although ONHIR has not identified HUD as an agency with a potential role, such as assuming or providing oversight of Navajo Housing Authority administration of remaining home-building activities, HUD officials told us that HUD would not be able to assume ONHIR housing functions. This is due to the nature of its block grant program, restricted oversight mechanisms, and limited capacity in terms of staff resources and technical skills to supervise construction. In addition, HUD officials said that their current oversight is limited to reviewing a sample of Indian Housing Block Grant program grantees’ policies, procedures, and implementation of procurement and environmental regulations, which may not be consistent with the oversight or authority needed should the Navajo Housing Authority administer the remaining ONHIR home-building activities. Warranties. Should ONHIR close before 2-year home warranties expire on the remaining homes constructed under ONHIR’s oversight, another agency would need statutory authority to oversee these home warranties. As previously mentioned, ONHIR is currently a signatory to the warranty along with the contractor and the client, and more than 52 homes will have warranties in effect after ONHIR’s proposed closure date of September 2018, according to ONHIR officials. In its draft transition plan, ONHIR suggests transferring warranty-related activities to the BIA Contract Office. However, according to BIA officials, BIA does not currently have the authority to conduct these activities, and BIA is not equipped to implement warranties. Post-move counseling. Another agency would need statutory authority to provide post-move counseling to the 52 clients who will remain under warranty after ONHIR’s proposed closure date of September 2018. Currently, ONHIR provides relocatees with post-move counseling during the 2-year warranty period. According to ONHIR’s management manual, the purpose of post-move counseling is to assist families in adjusting to their new house, connect families to local service agencies, and gain understanding about the client’s familial and employment situation. ONHIR’s March 2017 transition plan suggested that the post-move counseling program could be transitioned to BIA. However, BIA officials said BIA currently does not have the authority to conduct these activities. In November 2017, ONHIR officials said the program would discontinue for any newly certified applicants if cash settlements for relocation benefits were authorized, but they did not address what would happen to the 52 clients that will remain within the 2-year warranty period after September 2018. The Settlement Act does not include provisions on the transfer of activities after ONHIR’s closure, and as described above several activities will remain past ONHIR’s planned closure date. Without legal direction to authorize the transfer of ONHIR’s remaining activities to other federal entities, the future of these activities remains uncertain and may adversely affect those in the process of relocating. ONHIR Has Not Always Managed Navajo Trust Land in Accordance with Its Policies ONHIR Has Entered Into Lease and Other Agreements for Navajo Trust Land but Has Not Properly Managed Them ONHIR is statutorily required to administer the land taken into trust for the Navajo Nation pursuant to the Settlement Act as amended until relocation is complete. The act also authorizes ONHIR to issue leases for housing and other related facilities on the New Lands. ONHIR’s management manual, which governs its operations, states that it will grant appropriate requests for leases of the New Lands—both developed and undeveloped land—for homesites, businesses, and community services facilities, among other things. According to the manual, entities that want to lease property in the New Lands are to submit an application form and supporting documents to ONHIR. Since the 1980s, ONHIR has received applications from and granted leases to various businesses, the New Lands chapter, and other tribal entities. The leases give the lessee permission to occupy and use the land, including, in the case of developed land, any structures on it, for terms varying from 2 to 99 years. In addition, ONHIR has entered into or administered surface use agreements for the New Lands. Unlike ONHIR’s eligibility determinations and home-building activities, which were intended to have a finite end, the Navajo trust land will need to be managed in perpetuity so long as it is held in trust by the federal government. ONHIR’s draft transition and implementation plans identify BIA and the Navajo Nation as entities that could assume responsibility for managing the trust land once ONHIR terminates. However, ONHIR does not have the authority to transition management of the trust land it administers to another entity. Moreover, we identified a number of concerns with how ONHIR has maintained information or established controls for proper administration of leases and agreements for the New Lands, which could further hinder an eventual transition of these responsibilities to another entity. ONHIR Does Not Have a Complete Inventory of Leased or Occupied Land ONHIR does not have a comprehensive inventory of leased and vacant properties on or surface use and other agreements for Navajo trust land it administers. ONHIR officials identified 23 properties on trust land they administer through documentation and in interviews. Of these 23 properties, ONHIR possessed the current lease for 15 properties. ONHIR officials also identified 5 surface use agreements for Navajo trust land they administer, 3 of which are listed as active on their transition website. ONHIR officials said they have not maintained a comprehensive inventory because they had a long tenure with the agency and are cognizant of what properties and agreements exist. Federal internal control standards state that management should design control activities to achieve objectives and respond to risk. For example, as part of control activities, management clearly documents all transactions and other significant events in a manner that allows the documentation to be readily available for examination. Without developing a comprehensive inventory of leased and vacant properties on Navajo trust land that ONHIR administers, the entity which assumes responsibility for leasing the land will not have the information it needs to carry out that responsibility. As of December 2017, ONHIR Does Not Have Written Leases for Some Occupied Lands ONHIR has occupied or has allowed others to occupy Navajo trust land it administers without a written lease or agreement, which is inconsistent with ONHIR’s management manual. Specifically, of the 23 existing properties on trust land ONHIR officials identified, 7 were in use as of December 2017 but did not have a written lease, as required, for various reasons: ONHIR issued a permit for the use of one property in 2000 that was valid through 2005 and then, according to ONHIR officials, had an oral agreement to indefinitely extend the permit. The officials also said they had an oral agreement to lease another property. ONHIR itself occupies and uses 4 properties without leases, including a headquarters and New Lands office and two structures on the Padres Mesa Demonstration Ranch, discussed below. A lease for 1 property expired in 2011 but it has not been renewed and does not include an option to extend the lease beyond its initial termination date. The Navajo Nation is currently working to renew the lease because it has assumed responsibility from BIA for leasing its trust land. In its comments on a draft of this report, ONHIR stated that in the meantime the federal agency using the property has continued to pay rent to ONHIR while a new lease is negotiated. ONHIR officials said some of these properties do not have written leases because the agency deferred to the tribe’s wishes. However, not having written leases for these properties on trust land is inconsistent with ONHIR’s management manual, which calls for written leases and land use approvals for the New Lands. Without written leases for these properties, the entity which assumes responsibility for leasing the Navajo land that ONHIR has been administering will not know the status of these properties because they are being used without written leases. For Most of the Leases, ONHIR Is the Lessor Rather than the Tribe and No Successor Has Been Identified There are at least two parties to every lease of land, the lessor and the lessee. The lessor is generally the landowner, and the lessee is the party to whom the lease grants permission to use or occupy the land. However, the New Lands are held in trust by the federal government for the Navajo Nation, and federal law provides that trust lands may be leased by the Indian owners with the approval of the Secretary of the Interior. ONHIR is the lessor for 20 of the 22 leases that we reviewed. ONHIR officials said the leases were done this way because its management manual called for ONHIR to serve as the lessor. However, ONHIR changed its management manual in 2011 to say the Navajo Nation should serve as the lessor for business; commercial; industrial; and mineral leases unless the tribe requests ONHIR to be the lessor. ONHIR did not revise the leases in effect in 2011 to reflect this change. After the 2011 changes to the management manual, ONHIR became the lessor for the one business lease entered into for the New Lands. ONHIR did not provide documentation that the tribe requested ONHIR to serve as lessor for this lease. Navajo Nation officials said ONHIR informs the tribe about leases out of courtesy and does not seek the tribe’s permission to lease Navajo trust land. Moreover, the Navajo Nation Department of Justice has taken the position that ONHIR does not have the authority to lease Navajo trust land. In addition to these leases, ONHIR identified 5 surface use agreements for Navajo trust land it administers. In 3 of 5 of these agreements, ONHIR, not the tribe, is the party granting the right to access and use the Navajo trust land. However, ONHIR is not the landowner and this is also inconsistent with BIA’s leasing practices. In addition, of the current leases of New Lands with ONHIR as the lessor, 2 leases specify what is to happen should ONHIR close. None of the surface use agreements specify what is to happen should ONHIR close. ONHIR officials said that they have not updated or amended the other leases and agreements because there is no need to do so yet. ONHIR’s transition and implementation plans also do not identify which leases and agreements need to be amended or assigned upon ONHIR’s closure. In its March 2017 transition plan, ONHIR identified BIA as the successor agency for managing leases on the Navajo trust land ONHIR is currently administering. However, this is inconsistent with the Navajo Nation’s assumption of responsibility for leasing its trust land from BIA. Federal internal control standards state that management should design control activities to achieve objectives and respond to risk, for example, to ensure that transactions such as leases are properly executed. In addition, federal internal control standards state that management should design control activities to identify, analyze, and respond to change, including changes to the entity’s activities. Without ONHIR identifying which leases and other agreements need to be amended or assigned because they identify ONHIR as the lessor, any entity that assumes responsibility for leasing these trust lands in the event that OHNIR closes will not be able to effectively manage these properties. ONHIR Has Collected and Retained Revenues from These Lands Half of the 22 leases we reviewed required the lessee to pay a non- nominal amount (i.e., more than $1 a year) of annual rent to ONHIR. In addition, annual payments for 3 of 5 surface use agreements are made to ONHIR, according to ONHIR officials. According to agency documents, since the 1990s, ONHIR has collected and retained over $1 million in revenue from these leases of and surface use agreements for Navajo trust land it administers. ONHIR deposits the lease revenue into ONHIR’s Treasury account. ONHIR officials said they have used the revenue to aid relocation efforts by renovating facilities located on Navajo trust land ONHIR administers, providing grants to Navajo chapters, and funding other activities to benefit the relocatees. However, the Settlement Act as amended does not state that ONHIR may collect, retain, and use revenue from leases of Navajo trust land, and ONHIR officials have not identified another statute authorizing the agency to do so. ONHIR officials said the agency retained this revenue to ensure that all net revenues from these trust lands are used exclusively for the benefit of relocatees because the Settlement Act as amended requires the trust lands be administered for the benefit of relocatees. However, this statutory provision does not authorize ONHIR to receive lease revenues. ONHIR Is Operating the Padres Mesa Demonstration Ranch without a Land Use Agreement and Grazing Permit ONHIR is operating the Padres Mesa Demonstration ranch on Navajo trust land, but has not leased the land, which is inconsistent with ONHIR’s management manual. As mentioned previously, ONHIR’s management manual calls for written leases for and land use approvals of the New Lands. According to ONHIR officials, there is no requirement for them to have a lease or obtain permission from the tribe to occupy the structures on the ranch, including a range office, or operate a ranch on Navajo trust land. In addition, ONHIR’s grazing of the ranch’s cattle on the New Lands without a grazing permit is inconsistent with ONHIR’s regulations. ONHIR’s grazing regulations require a grazing permit for all livestock grazed on the New Lands, but ONHIR does not have a grazing permit for the cattle on the ranch because ONHIR officials decided it was not necessary to issue a permit to itself. Moreover, ONHIR is not eligible for a grazing permit under its regulations because it is a federal entity and only enrolled Navajo tribal members are eligible for permits. We are examining ONHIR’s use of appropriations to establish and operate a cattle ranch in a separate legal opinion. ONHIR has identified two different entities to assume operation of the ranch in the event of its closure. ONHIR’s March 2017 transition plan identified BIA as the entity to oversee the continued operation of the Padres Mesa Demonstration Ranch. However, BIA officials said the agency does not have the statutory authority to operate a for-profit ranch. Moreover, these officials said they are not interested in doing so because it is a role for the tribe and would be a conflict of interest for the agency since BIA regulates grazing on trust land. In addition, ONHIR’s October 2017 implementation plan indicates that the Navajo Nation would assume responsibility for the ranch after ONHIR’s closure and after negotiating an agreement with the chapter. Because the ranch is located on Navajo Nation trust land, the tribe could choose to continue its operation after ONHIR closes. Navajo officials said they are interested in operating the ranch but they have not determined how the for-profit ranch would be managed if the tribe also regulated grazing on the New Lands, which it is also interested in doing. Congressional Action May also Be Needed to Address Other Provisions in the Settlement Act as Amended Congressional action may also be needed to address other provisions in the Settlement Act as amended regarding (1) the use of the acquired trust lands, (2) trust acquisition, and (3) the Navajo Rehabilitation Trust Fund. Use of Acquired Trust Lands to Benefit Relocatees and Regulation of Grazing Trust land is generally held in trust for the benefit of an Indian tribe or individual Indian. However, the Settlement Act as amended requires the land taken into trust pursuant to the Settlement Act, including the New Lands, to be used solely for the benefit of relocatees. The New Lands chapter government wants this restriction to continue if and when ONHIR terminates. However, without congressional action to continue this restriction, it is likely the trust lands acquired in Arizona pursuant to the Settlement Act as amended would be administered for the benefit of the tribe as a whole rather than to solely benefit the relocatees. In addition, as part of its administration of the New Lands, ONHIR’s regulations governing grazing of livestock on the New Lands are different from how grazing is regulated by BIA for other Indian trust land. The purpose of ONHIR’s regulations was to aid in the resettlement of Navajo Indians residing on Hopi Partitioned Lands to the New Lands and to preserve the New Lands’ forage, land, and water resources. Under these regulations, grazing permit holders must be permanent residents of the New Lands. In contrast, under BIA’s regulations that apply to the portions of the Navajo reservation not under ONHIR’s administration, any Navajo tribal member is eligible for a grazing permit. Navajo Nation and chapter officials told us they would like ONHIR’s grazing regulations to continue if ONHIR were to close. ONHIR’s implementation plan identifies BIA as the entity to regulate grazing on the New Lands after ONHIR closes. ONHIR’s implementation plan also says BIA officials have agreed to regulate grazing on the New Lands in accordance with ONHIR’s regulations. However, BIA officials said Interior currently does not have the authority to regulate grazing on the New Lands, so they cannot make any decisions on how to do so. In addition, Navajo Nation officials said they want to assume responsibility for regulating grazing on the New Lands and prefer to have ONHIR’s grazing regulations, which are stricter than BIA’s, remain in place at least at the Padres Mesa Demonstration Ranch. Should ONHIR close, Congress will need to consider addressing how grazing on the New Lands will be regulated after ONHIR’s closure. Mandatory Trust Acquisition Provision for the Navajo Nation The Settlement Act as amended provides for two categories of land to be taken into trust for the Navajo Nation: (1) up to 250,000 acres of BLM land in Arizona and New Mexico that is transferred to the tribe (category 1) and (2) up to 150,000 acres of land held in fee by the Navajo Nation (category 2). No more than 35,000 of the 400,000 acres selected could be in New Mexico. The tribe was authorized to select the lands in both categories for 3 years after the 1980 amendments’ enactment, and then ONHIR was authorized to select the lands after consultation with the Navajo Nation. Once the lands are selected, the Settlement Act as amended provides for the mandatory acquisition of these selected lands as land held in trust by the federal government for the Navajo Nation. Mandatory trust acquisitions are not subject to BIA’s regulatory requirements for discretionary trust acquisitions under the Indian Reorganization Act. As of December 2017, about 12,000 of the 400,000 acres had yet to be selected, and about 24,000 acres that had been selected had yet to be taken into trust (see table 3). The over 11,000 acres of category 1 land selected but not yet taken into trust are located in New Mexico. These lands have not been taken into trust because of unprocessed coal preference right lease applications. Congress will need to determine whether the Navajo Nation should be able to select the entire 400,000 acres and have that land taken into trust as a mandatory trust acquisition, as provided for in the Settlement Act as amended. Without congressional action, any additional land the tribe acquired and wanted taken into trust would be a discretionary trust acquisition subject to BIA’s regulations. Furthermore, the Navajo Nation has raised two additional issues regarding the trust acquisition provision that Congress may also need to address. Deselection and reselection. The Navajo Nation would like to make changes to some of the land it has selected and make new selections, but the Settlement Act as amended does not authorize deselection of land the tribe previously selected to be taken into trust pursuant to the act’s mandatory trust acquisition provision. Deselection had not occurred as of January 2018, but bills have been introduced in Congress that would cancel some of the tribe’s land selections and authorize the tribe to replace those with new selections. Without statutory authorization, the Navajo Nation cannot deselect these lands and make new selections to reach the 400,000 acres provided for in the Settlement Act as amended. Trust status versus restricted fee status. The Navajo Nation has indicated that it is interested in having a statutory option for the selected land to be held in restricted fee status rather than held in trust. In 2016, a law was enacted that mandated a trust acquisition for certain parcels of land unassociated with the Settlement Act unless the Navajo Nation elected to have the land conveyed to it in restricted fee status. The President of the Navajo Nation has testified before Congress that the tribe is interested in having this option in future legislation involving the Settlement Act. Without statutory authorization, the land not yet selected pursuant to the Settlement Act as amended could not be held in restricted fee status if the tribe so chooses. However, without congressional action this cannot be changed. The Navajo Rehabilitation Trust Fund Established in the U.S. Treasury by the 1988 amendments to the Settlement Act, the Navajo Rehabilitation Trust Fund is essentially a loan from the federal government to the Navajo Nation to be paid back from revenues derived from leases of the lands and minerals taken into trust in New Mexico pursuant to the Settlement Act as amended. From fiscal years 1990 through 1995, Congress appropriated approximately $16 million to the Trust Fund. The Settlement Act as amended requires all net income derived by the Navajo Nation from the surface and mineral estates of lands in New Mexico taken into trust pursuant to the act to be deposited into the Trust Fund. Moreover, the net income is required to be used to reimburse the general fund of the Treasury for the amounts originally appropriated to the Trust Fund. According to leasing and other documents from the Navajo Nation and BLM, several of these parcels have been generating modest income since at least the 1990s. Specifically, BLM identified several parcels of the New Mexico trust land with grazing allotments or oil and gas leases. In addition to these sources of revenue, the tribe entered into an agreement for use of a parcel of the New Mexico trust land that requires, beginning in 2015, annual rent payments of $25,000 to be paid to the Trust Fund. The Navajo Nation has not reimbursed the general fund of the Treasury for the approximately $16 million appropriated to the fund, contrary to the statutory requirement to do so. While the Navajo Nation acknowledges its legal obligation to repay the Treasury, the tribe is seeking loan forgiveness because the Trust Fund’s purpose was to aid the relocatees and the tribe views such aid as an unfulfilled federal obligation, according to tribal officials. Further, these officials said repaying the Treasury would eliminate any benefit the relocatees received from the land because the revenue generated from the New Mexico trust lands and minerals has not been sufficient to justify partial payment. Because much of the land the Navajo Nation selected in New Mexico has not been taken into trust and the land that has been taken into trust is generating modest income, Congress will need to consider whether to continue the statutory repayment requirement or repeal it. If Congress decides to repeal the repayment requirement, it will need to consider specifying whether revenues from the trust lands acquired in New Mexico pursuant to the Settlement Act as amended are to be used by the tribe exclusively for the benefit of relocatees. Conclusions The relocation of Navajo and Hopi families has taken more time than originally anticipated when the Settlement Act was enacted in 1974, extending ONHIR operations more than 30 years beyond the original estimates. ONHIR has proposed to close by the end of fiscal year 2018 and initiated steps to identify agencies to handle the remaining activities. However, the Settlement Act does not give other agencies the authority to undertake various ONHIR responsibilities. Therefore, if ONHIR closes without congressional actions, any potential successor agency will not have the appropriate authority to administer any remaining activities. As a result, newly certified applicants and clients who remain under the 2-year warranty period will not have an entity to assist with securing decent, safe, and sanitary relocation homes, as intended in the Settlement Act. Further, several other provisions in the Settlement Act as amended may need congressional action. These include (1) the requirement for the trust lands acquired in Arizona pursuant to the Settlement Act as amended to be used solely for the benefit of relocatees and whether grazing on the New Lands should be regulated consistent with ONHIR’s current regulations; (2) the mandatory trust acquisition provision for the Navajo Nation; and (3) the requirement for the Navajo Nation to repay the U.S. Treasury for appropriations made to the Navajo Rehabilitation Trust Fund. In addition, although ONHIR believes it has completed most of its responsibilities under the act and believes it can close by September 2018, it does not have the authority to make this decision. Rather, the Settlement Act states that ONHIR will cease to exist when the President of the United States determines that its functions have been fully discharged. However, ONHIR has yet to request that the President make this determination. Moreover, OHNIR has not prepared complete information about its various activities, such as eligibility determinations, appeals, and home building, which increases the risk that successor agencies will not be able to effectively assume ONHIR’s activities. Finally, ONHIR has not appropriately managed leases and other agreements for Navajo trust land it administers or identified changes that would need to be made in leases in the event that it closes. Because the land ONHIR administers is held in trust by the federal government, another entity will need to assume these responsibilities if ONHIR closes. However, OHNIR does not maintain a complete inventory of leased or occupied land and does not have written agreements for some occupied land. Further, ONHIR has not identified which leases will need to be amended to identify the appropriate lessor and the entity to receive the lease revenue. Without these actions, the entity that assumes responsibility for leasing the New Lands will not have the information it needs to effectively manage the properties. Matters for Congressional Consideration We are making the following four matters for congressional consideration for when ONHIR closes: Congress should consider providing necessary authority for other agencies to continue remaining activities when ONHIR closes. (Matter for Consideration 1) Congress should consider determining (1) whether the requirement for the land acquired pursuant to the Settlement Act as amended to be used solely for the benefit of relocatees should continue and (2) how grazing on the New Lands should be regulated. (Matter for Consideration 2) Congress should consider addressing the mandatory trust acquisition provision for the Navajo Nation in the Settlement Act as amended. (Matter for Consideration 3) Congress should consider whether the requirement for the Navajo Nation to repay the U.S. Treasury for appropriations made to the Navajo Rehabilitation Trust Fund should continue. (Matter for Consideration 4) Recommendations for Executive Action We are making the following five recommendations to ONHIR. The Executive Director of ONHIR should request a presidential determination as to whether ONHIR has fully discharged its responsibilities and whether it should close. (Recommendation 1) The Executive Director of ONHIR should prepare complete information on the remaining denied households who could still file for federal appeals. Such information could include paper case files and information in ONHIR’s client database for those households. (Recommendation 2) The Executive Director of ONHIR should prepare complete information on warranties and contractors. Such preparation should include linking warranty complaints to the relevant contractor, completing missing warranty information, and completing information on contractors’ past performance. (Recommendation 3) The Executive Director of ONHIR should establish a comprehensive inventory of (1) properties located on trust land it administers, (2) leases of those properties, and (3) surface use and other use agreements for trust land it administers. (Recommendation 4) The Executive Director of ONHIR should identify which leases and other agreements need to be amended or assigned because (1) ONHIR is the lessor, (2) the lease or agreement provides for annual payments to be made to ONHIR, and/or (3) the lease or agreement terminates upon ONHIR’s closure. (Recommendation 5) Agency Comments and Our Evaluation We provided a draft of this report to the Office of Navajo and Hopi Indian Relocation (ONHIR); Department of the Interior; Department of Justice; Department of Housing and Urban Development (HUD); Department of Health and Human Services; Department of the Treasury; the Navajo Nation; and the Hopi Tribe for review and comment. The Department of Justice, Department of the Treasury, and the Hopi Tribe did not provide comments. The Department of the Interior and the Department of Health and Human Services provided technical comments that we incorporated as appropriate. We received comments via e-mail from HUD’s Acting Director of Grants Evaluation in the Office of Native American Programs. In this e-mail, the Acting Director stated that HUD believes the report should clearly state that HUD would not be an appropriate agency to continue ONHIR’s housing functions, because it does not provide direct services to tribes, review or approve actions or transactions, or have the technical capacity to assume ONHIR housing functions. We have acknowledged this in the report and our objective was to identify legislative actions that may be necessary to transition remaining relocation activities. Therefore, our focus was on whether or not additional authorities might be needed if ONHIR were to close. Although we present background information about other federal agencies and tribal entities with responsibilities in Indian Country as well as perspectives from various agencies on the transition and remaining activities, we did not independently evaluate these agencies’ authorities or capacity and do not draw conclusions about which agencies and tribal entities including HUD should be provided the necessary authority by Congress to continue ONHIR’s remaining activities. In ONHIR’s comments, which are summarized below and reproduced in appendix II, ONHIR did not explicitly agree or disagree with our five recommendations but stated that it had either already taken steps or had plans to once a successor is identified. With regard to the draft report’s first recommendation to request a presidential determination as to whether ONHIR has fully discharged its responsibilities and whether it should close, ONHIR stated that it has worked for decades with the Office of Management and Budget within the Executive Office of the President on completing its work. While this may be the case, our review found that no presidential determination for ONHIR to cease operation has been requested, and no such decision has been communicated, therefore we believe our recommendation is valid. With regard to the second recommendation to prepare complete information on the remaining denied households that could still file for federal appeals, ONHIR stated that it has a solid grasp of potential appeals. Specifically, ONHIR said that case files have been identified and all needed information already exists in the case files and in its database. ONHIR stated that it will provide potential successor agencies with any information they request. However, because it is unclear when ONHIR will close and which agency will assume ONHIR’s remaining eligibility and appeals activities at that time, a successor agency will not have the institutional knowledge to follow and connect the information needed for determining eligibility and providing support for cases for which appeals were filed in federal court. Therefore, we maintain that ONHIR should proactively prepare the necessary information associated with these appeals for any successor agency. Preparing complete and readily available information could minimize the challenges the successor agency may encounter in administering future appeals and eligibility determinations. With regard to the third recommendation to prepare complete information on warranties and contractors, ONHIR stated that up- to-date and complete information on warranty status appears in the existing case files. We maintain our concern about the accuracy of ONHIR’s warranty database because in its comment letter ONHIR acknowledged that some complaints were entered multiple times due to data entry issues. Moreover, ONHIR states that its staff know which relocatee homes will still be under warranty as of September 30, 2018, and have compiled a list of such homes. However, preparing the case file and list of such homes does not address the deficiencies that we found in the warranty database. While we revised the report by including ONHIR’s statement that its system has the capability to search warranty complaints, we continue to believe that the information available through searches will be incomplete for a successor agency because the information is disconnected. Without linking warranty complaints to the relevant contractor, completing missing warranty information, and completing information on contractors’ past performance, any successor agency may have difficulty understanding what warranty issues have already been addressed or have difficulty overseeing contractors to help ensure that newly certified applicants secure decent, safe, and sanitary relocation homes. With regard to the fourth recommendation to establish a comprehensive inventory of (1) properties located on trust land it administers, (2) leases of those properties, and (3) surface use and other use agreements for trust land it administers, ONHIR stated that such documentation exists and is maintained and updated. However, this statement is inconsistent with what we found during our review. We reviewed information provided by ONHIR from various sources as part of our review, and the information available did not include a comprehensive inventory of leased and vacant properties on or surface use and other agreements for Navajo trust land ONHIR administers. We continue to believe that without developing a comprehensive inventory of leased and vacant properties on Navajo trust land that ONHIR administers and leases and agreements for those properties, the entity that assumes responsibility for leasing the land will not have the information it needs to carry out that responsibility. With regard to the fifth recommendation to identify which leases and other agreements need to be amended or assigned because (1) ONHIR is the lessor; (2) the lease or agreement provides for annual payments to be made to ONHIR, and/or (3) the lease or agreement terminates upon ONHIR’s closure, ONHIR stated that it will move forward with specific transition activities after a successor entity is identified. We believe that such an approach is risky because it assumes that ONHIR staff will be available to work closely with staff from a new successor entity to personally transfer their knowledge to the new staff. However, there is no guarantee that ONHIR will continue operating or that its many retirement-eligible employees will be available to assist any successor entities during a transition period. We, therefore, maintain that the Executive Director of ONHIR should identify which leases and other agreements need to be amended or assigned. ONHIR also made other comments in its letter, which we have responded to in appendix II. The Navajo Nation and the Navajo Nation Human Rights Commission also submitted comments on a draft of this report, which are reproduced in appendix III and IV. We are sending copies of this report to the appropriate committees and the Office of Navajo and Hopi Indian Relocation, Department of the Interior, Department of Justice, Department of Housing and Urban Development, Department of Health and Human Services, Department of the Treasury, the Navajo Nation, and the Hopi Tribe. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact us at (202) 512-8678 or shearw@gao.gov or (202) 512-3841 or fennella@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology This report examines (1) ONHIR’s management of the eligibility and appeals processes and the status of these activities; (2) ONHIR’s management of the home-building process and the status of these activities; (3) executive branch or legislative actions that may be necessary to terminate ONHIR in an orderly manner and transition remaining relocation activities; (4) ONHIR’s management of Navajo trust lands and related transition activities; and (5) legislative actions that may be necessary to address other Settlement Act provisions. To address these objectives, we reviewed our prior related reports and other studies and analyzed relevant laws and regulations. We interviewed ONHIR officials on relocation and other key activities, and we interviewed ONHIR’s hearing officer to better understand his role in the appeals process. We also interviewed federal officials from the Department of the Interior’s (Interior) Bureau of Indian Affairs (BIA), Office of Inspector General, and Bureau of Land Management (BLM); Department of Housing and Urban Development (HUD); Department of the Treasury (Treasury); and Indian Health Services within the Department of Health and Human Services. We also conducted interviews with tribal government officials from the Navajo Nation and the Hopi Tribe including officials from the Navajo-Hopi Legal Services Program, the Navajo-Hopi Land Commission Office, and the Navajo Nation Human Rights Commission. Additionally, we conducted two visits in August 2017 to ONHIR’s offices in Flagstaff and Sanders, Arizona, and the Navajo region where we interviewed ONHIR staff, observed a transition meeting, took two separate tours of homes (one with ONHIR officials and the other with Navajo Nation officials) and observed rangeland management activities, and attended presentations in three Navajo Nation chapters. Additionally, to address the first, second, and third objectives, we reviewed ONHIR’s management manual, policy memorandums, the 1981 Report and Plan, and the 1990 Plan Update on relocation activities, including the eligibility and appeals processes, and home-building activities. We obtained two data files as of June 2017 from ONHIR’s Client Database—Client Master and Hearing File—to analyze the time frame for becoming certified for relocation benefits and relocating to the house provided by ONHIR. Using the case numbers in the Hearing File, we identified those applicants that were certified for relocation benefits through the administrative appeals process. We assessed the reliability of ONHIR’s data files by conducting a file review of a random sample of 30 case numbers, which we selected based on the distribution of two factors: (1) application date, and (2) type of determination. We recorded the relevant information in the paper files— such as date applied, date of determination, determination code, and date relocated—and compared it to the data fields in the electronic files. We determined that ONHIR’s data files were sufficiently reliable for the purpose of our report. We also reviewed home-building-related documentation, including contractor lists, contracts, warranty information, and contractor performance reports, to understand ONHIR’s oversight of home-building activities. In addition, we reviewed ONHIR’s transition-related documentation including transition guiding principles, the draft transition plan, and the draft “From Transition Plan to Transition Implementation” document to understand ONHIR’s planned closure. We also reviewed and assessed the original statute to determine the extent to which ONHIR has the authority to transfer those activities. We interviewed ONHIR and Interior officials to identify any opportunities for modifying or continuing other Settlement Act provisions. To address the fourth and last objectives, we obtained from ONHIR copies of all leases and use agreements for Navajo trust land it administers pursuant to the Settlement Act as amended from the 1980s to the present. We reviewed the terms of the leases and agreements provided to identify specific elements, such as the identity of the lessor, lessee, and any concurring parties; start and end dates; required rental payments, if any; and any provisions on the leases’ continuation or termination in the event that ONHIR closes. We compared the leases to ONHIR’s list of properties on Navajo trust land it administers to determine if all of the properties were covered by leases. We also reviewed information, such as summary spreadsheets, on sources of revenue ONHIR collects, retains, and uses, including documentation of Treasury accounts where such revenue is deposited. We cross-checked the revenue information ONHIR provided with information from Treasury about deposits into ONHIR’s Treasury account and we interviewed ONHIR officials regarding discrepancies. Revenues from the Padres Mesa Demonstration Ranch were included as part of the revenue information and ONHIR provided a separate accounting of the obligations, expenditures, and revenues for the ranch. We reviewed ONHIR’s regulations and management manual for policies and procedures on leasing and grazing on the New Lands and compared them to the agency’s practices. We also reviewed BIA’s regulations on leasing and grazing on Indian trust lands under the agency’s administration to identify comparable grazing and leasing policies and procedures. Furthermore, we interviewed ONHIR, Interior, BLM, Treasury, and Navajo Nation officials and reviewed documents from the agencies and tribe to identify any opportunities for modifying or continuing other Settlement Act provisions. We conducted this performance audit from March 2017 to April 2018 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Appendix II: Comments from the Office of Navajo and Hopi Indian Relocation GAO Comments 1. We revised the report to state that ONHIR has no authority to require any person to leave the land that was awarded to the other tribe. 2. We disagree with the Office of Navajo and Hopi Indian Relocation’s (ONHIR) characterization of our report and did not make a change based on this comment. Our report focuses on ONHIR’s management of the home building process and the status of these activities. To appropriately address our audit objective on the home building process, we included the experiences of the population that was being served by ONHIR. While ONHIR states that the information included in our report is unsubstantiated, we do not assert that the views on home building from those we attributed—tribal government officials and relocatees—are accurate or draw conclusions about the reasons for the condition of the homes. Further, we presented ONHIR’s counterargument to the concerns raised by the relocatees to provide context and balance, with additional details explained in footnotes. Throughout our report, we ensured a balanced presentation with an objective tone, consistent with generally accepted government auditing standards and our quality assurance framework. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Moreover, our description of Navajo Nation chapters was reviewed and verified by the Navajo Nation, therefore we believe it accurately states the views of Navajo Nation officials. 3. We revised the report to indicate the attorney fees reported were over a 35-year period. 4. We revised the report to state that, for the third application period, the requirement was for applicants to maintain legal residency until their contact with ONHIR. 5. We made revisions to the report to include ONHIR’s efforts related to eligibility determination, such offering administrative appeals to Navajos for whom ONHIR could not show actual receipt of denial letters and using restricted delivery certified mail for almost 30 years. 6. We made revisions to the report to include ONHIR’s perspective on the difficulties in determining residency because of the nature of Navajos’ employment opportunities. 7. Our report does not evaluate the reasons that have affected the length of the appeal process because it is not pertinent to our objectives. Therefore, we did not make a change to the report in response to this comment. 8. Although this is new information that was not presented to us during our review, it does not materially affect our findings, therefore we did not make a change in the report. 9. We clarified the report to state that ONHIR consulted with the Department of Justice in Washington, D.C, and the U.S. Attorney’s Office in Arizona. 10. We clarified the report to indicate that, in response to the Herbert decision, ONHIR was required to provide notices to “potentially” eligible applicants. 11. Our report focuses on actions that may be necessary to terminate ONHIR in an orderly manner and transition remaining relocation activities. We did not make a change in the report in response to ONHIR’s comment because ONHIR had not identified and compiled the case files during our review that would be necessary or easily accessible for a successor agency. While ONHIR states in its letter that case files have been identified and all needed information already exists in the case files and in its database, because these activities may have occurred subsequent to our review, we cannot confirm the accuracy of this comment. We maintain our concerns about ONHIR’s database given its admission of data entry issues as stated in the comment letter. 12. We revised the headings of two report sections to emphasize the distinction between administrative appeals and appeals to the federal court. 13. We revised the report to include ONHIR’s perspective on allowing oral evidence. 14. We revised the report to incorporate information ONHIR provided related to the communities to which relocatees have moved. 15. We clarified the report to state that relocatees with existing Navajo homesite leases can have their relocation home built on the homesite lease site if it meets feasibility requirements. 16. We revised the report to incorporate information ONHIR provided on relocatees who chose to relocate to remote areas. 17. Our report focuses on ONHIR’s management of the home building process. We did not make a change to the report in response to ONHIR’s comment because we already describe several procedures related to home building, including contractor licensing requirements and feasibility studies. The report also acknowledges that houses have passed final inspection. 18. As described in comment 2, we disagree with ONHIR’s characterization of our methodology. We did not make a change in the report because we maintain that including the experiences of the population served by ONHIR is appropriate for balance. 19. We disagree with ONHIR’s characterization of our report and did not make a change to the report based on this comment. Throughout the body of the report, we have included ONHIR’s policies, its implementation of activities, as well as the statements of officials related to relocatees’ home-building concerns. 20. We have made revisions to clarify the figure title. The two photographed houses are on the Navajo reservation, shown to us during our site visit. Because one of the houses was shown to us by ONHIR officials, we believe the home was built by ONHIR. The other home was from a separate tour with Navajo Nation officials. The Navajo Nation officials indicated that the home was built by ONHIR. 21. As described in comment 2, we disagree with ONHIR’s characterization of our methodology. We did not make a change in the report because we maintain that including the experiences of the population served by ONHIR is appropriate for balance. 22. As described in comment 2, we disagree with ONHIR’s characterization of our methodology. Throughout the report, we specifically attribute all the views on home building to those we interviewed—tribal government officials and relocatees. We also do not draw conclusions about the reasons for the condition of the homes. We did not make a change in the report because we maintain that including the experiences of the population served by ONHIR is appropriate for balance. 23. We revised the report to include ONHIR’s statement about the search capability of its electronic data system. 24. During our review, ONHIR officials did not identify contracting for post- move counseling services as an option that they have considered nor did we find any such reference in transition documents we reviewed. Therefore we have not made any changes to the report based on this comment. 25. We disagree with ONHIR’s characterization of our report. We reviewed information provided by ONHIR from various sources, and accurately reported that ONHIR does not have a comprehensive inventory of leased and vacant properties or surface use and other agreements for Navajo trust land it administers. Therefore, we made no changes in response to this comment. 26. We disagree with ONHIR’s characterization of our report and did not make a change in the report based on this comment. ONHIR’s management manual calls for written leases and land use approvals for the New Lands, whether or not the Navajo Nation requests these. It is not the responsibility of the trust beneficiary to request a written lease. The trustee has a duty to maintain clear, complete, and accurate books and records regarding trust property. 27. We disagree with ONHIR’s statement that it will wait until a successor is identified to inform it of the leases. Moving forward with specific transition activities only after a successor entity is identified is a risky approach because it assumes that ONHIR staff will be available to work with staff from a successor entity to transfer their knowledge to the new staff. However, there is no guarantee that ONHIR will continue to be operating at that time or that its many retirement- eligible employees will be available to assist any successor entities during a transition period. ONHIR has proposed closing on September 30, 2018. As of March 2018, no successor entities have been designated or authorized to assume any ONHIR activities. As we recommended, clearly documenting what needs to happen as part of the transition will help ensure a smoother transition in the event that there is not a transition period between ONHIR and a new successor entity. 28. We revised the report to indicate that, according to ONHIR, Federal Aviation Administration has continued to pay rent to ONHIR while a new lease is negotiated. 29. We disagree with ONHIR’s characterization of the report and did not make a change based on this comment. As we reported, the Settlement Act as amended does not specifically authorize ONHIR to collect, retain, and use revenues from leases of Navajo trust land it administers. The Settlement Act as amended also does not specify whether ONHIR, the Navajo Nation, or the relocatees should receive lease revenues. However, as we reported, under BIA’s regulations for trust land it administers, revenue from leases is to be either paid directly to the tribe whose trust land is being leased or to BIA, which deposits the revenue in the tribe’s trust account that generally earns interest. BIA officials told us leases of trust land that provide for BIA to retain lease revenue would not be consistent with the agency’s trust responsibility. 30. We recognize that ONHIR is not, and has never been, part of BIA. As we note in the report, the comparison to BIA is instructive because BIA administers the vast majority of Indian trust land. In addition, ONHIR in its comments and draft transition plan identify BIA as a possible successor entity for some activities. 31. As described in comment 29, we disagree with ONHIR’s characterization of its duties and powers as a trustee and did not make a change to the report. The Settlement Act as amended does not specifically authorize ONHIR to collect, retain, and use revenues from leases of Navajo trust land it administers. Moreover, BIA officials told us leases of trust land that provide for BIA to retain lease revenue would not be consistent with the agency’s trust responsibility. 32. We disagree with ONHIR’s characterization of the realities of leasing Navajo trust land and did not make a change to the report. ONHIR did not provide documentation of requests from the Navajo Nation for ONHIR to serve as the lessor on some commercial leases. When ONHIR served as the lessor, ONHIR provided the Navajo Nation with some leases for “technical review” or for “review and comment”. However, only one of the leases we reviewed includes the Navajo Nation President’s signature when the tribe, or a tribal entity, is not the lessee. Moreover, as we reported, the Navajo Nation Department of Justice repeatedly informed ONHIR that it lacked the authority to lease Navajo trust land. 33. As described in comment 27, we disagree with ONHIR’s planned approach to wait until a successor is identified and did not make a change in the report. Moving forward with specific transition activities only after a successor entity is identified is a risky approach because it assumes that ONHIR staff will be available to work with staff from a successor entity to transfer their knowledge to the new staff. However, there is no guarantee that ONHIR will continue operating or that its many retirement-eligible employees will be available to assist any successor entities during a transition period. 34. We clarified the report to note that another entity is needed to assume remaining home building activities. 35. We clarified the report to include ONHIR’s statement that it has had regular communications with executive and legislative branch offices on completing its work and closing. 36. We disagree with ONHIR’s comments that the report is misleading related to a presidential determination. Although we included ONHIR’s statement on its communications about closure in the report, we maintain that without a presidential determination, ONHIR has not met the explicit requirements for being permitted to cease operations under the Settlement Act. 37. As described in comment 11, during the course of our review, ONHIR did not have complete information readily available for use by a successor agency. We cannot assure that any efforts ONHIR has taken subsequently to compile this information as stated in its comment letter are accurate. We continue to believe that ONHIR should proactively compile necessary information rather than waiting for a successor to request it. Moreover, we maintain our concerns about ONHIR’s database given its admission of data entry issues in its comment letter. Therefore, we did not make a change in the report based on this comment. Appendix III: Comments from the Navajo Nation Appendix IV: Comments from the Navajo Nation Human Rights Commission Appendix V: GAO Contacts and Staff Acknowledgments GAO Contacts Staff Acknowledgments In addition to the contact named above, Jill Naamane and Jeffrey Malcolm (Assistant Directors), Chir-Jen Huang (Analyst in Charge), Susan Baker, William Chatlos, Brad Dobbins, Justin Fisher, Randi Hall, Erik Kjeldgaard, Ellie Klein, Jessica Sandler, Jennifer Schwartz, Jena Sinkfield, and Jeanette Soares made key contributions to this report.
target: In 1974, the Settlement Act was intended to provide for the final settlement of a land dispute between the Navajo and Hopi tribes that originated nearly a century ago. The act created ONHIR to carry out the relocation of Navajo and Hopi Indians off land partitioned to the other tribe. ONHIR's relocation efforts were scheduled to end by 1986. However, those efforts continue today. GAO was asked to review ONHIR's operations. Among other things, this report discusses (1) ONHIR's management and the status of relocation activities and (2) executive branch and legislative actions that may be needed for ONHIR to close and transfer remaining activities. GAO reviewed documentation; interviewed officials at ONHIR and other federal agencies, as well as from the Navajo Nation and Hopi Tribe; and conducted two site visits to ONHIR's offices and the Navajo reservation in Arizona. As of December 2017, the Office of Navajo and Hopi Indian Relocation, and its predecessor agency (collectively, ONHIR), has relocated 3,660 Navajo and 27 Hopi families off disputed lands that were partitioned to the two tribes and provided new houses for them. Although the Navajo-Hopi Settlement Act of 1974 (Settlement Act) intended for ONHIR to complete its activities 5 years after its relocation plan went into effect, the agency has continued to carry out its responsibilities for over three decades beyond the original deadline and the potential remains for relocation activities to continue into the future. For example, GAO found that by the end of fiscal year 2018 at least 240 households whose relocation applications were previously denied could still file for appeals in federal court and if the court rules in their favor these households could become eligible for relocation benefits under the Settlement Act, and ONHIR is still responsible for helping homeowners who might request repairs for 52 relocation homes that remain under warranty. ONHIR believes that it has substantially completed its responsibilities under the Settlement Act and has stated its intent to close by September 2018. However, ONHIR does not have the authority to close its operations and has not yet taken the steps necessary to facilitate such a closure. GAO identified a number of areas where either executive branch or congressional actions would be needed to affect a closure of ONHIR, as shown in these examples: The Settlement Act states that ONHIR will cease to exist when the President determines that its functions have been fully discharged. ONHIR, however, has not requested a determination nor provided specific information to the President that could facilitate such a decision. ONHIR has prepared a transition plan and identified potential successor agencies that could assume its remaining activities. However, officials at these agencies said they currently do not have authority under the Settlement Act to undertake ONHIR's activities. Without congressional authorization these agencies would not be able to succeed ONHIR. ONHIR has prepared an implementation plan to guide its closure but has not yet taken necessary steps to ensure that all the key information about its activities has been compiled. For example, ONHIR's database for tracking warranty requests is missing information, such as the date of warranty repairs and other contractor information. Similarly, ONHIR has not prepared complete information from its files on the remaining denied households who could file for federal appeals. Federal internal control standards state that agencies should identify and respond to risks and use quality information. By not preparing complete information on the relocation activities it has been engaged in, ONHIR places an effective transition of its functions to another agency at risk. This is because any successor agency authorized to continue these activities will not have the complete information needed to effectively fulfill these functions.